BillM223
Expert Alumni

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"Also, how can I add 2024 Medigap premiums not reimbursable by HSA to IRS Schedule A so that they carry over to Schedule CA line H?"

 

Are you saying that you are not 65 years of age? Normally, you would add these premiums to Schedule A on the 1040. Then they would flow to the CA return.

 

"On Schedule CA, under Medical & Dental Expenses and HSA Distributions Smart Worksheet, the software calculated that we could take a deduction of the distribution amounts (less 7.5% of AGI). Is this OK?"

 

Honestly, in California, I doubt that it is. However, on the federal return, the IRS explicitly allows you to pay from your HSA expenses that are several years old, which normally would not be allowed ( they are normally deductible in the year in which you actually paid the expense).

 

But the California Instructions for form CA state: "Health Savings Account (HSA) Distributions If you received a tax-free HSA distribution for qualified medical expenses, enter the qualified expenses paid that exceed 7.5% of federal AGI on line 4, column C."

 

Clearly, the rules for an HSA allow for you to reimburse yourself for medical expenses from years before, so either the author of these instructions does not know this or does not care.

 

My suggestion - you are free to accept it or not - is to let TurboTax do its thing, but to document this, in case anyone ever asks.

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